A major followup this morning to our status report yesterday on the idled Fauntleroy Place/Whole Foods development at 39th/Alaska/Fauntleroy: WSB has learned that a lawsuit has just been filed. The firm that has been developing the project, BlueStar Management, is suing Fauntleroy Place LLC (the official site owners), Seattle Financial Group, and Seattle Capital Group (one of the governing parties of FP LLC). We are working right now to get a copy of the full complaint, but a watchlist of newly filed lawsuits summarizes this one as alleging breach of contract and defamation. Construction on the site has been idle since last fall, and Seattle Capital disclosed in late January that they were in the process of selling the site, though they have not been available for comment this week and the status of the reported sale is unknown. More to come; we will add comments and documents to this story as we get them. 11:12 AM UPDATE: BlueStar’s Easton Craft referred us to the company’s lawyers for comment, and we expect to speak with them soon. There also is word of an additional lawsuit linked to this project, also filed this week, and we are working to get details on that. 8:09 PM UPDATE: We have a statement from Susan Rae Fox at Ryan, Swanson and Cleveland, the firm representing BlueStar, in response to several questions we asked:

BlueStar Management, Inc. filed the action to recover unpaid management fees incurred in connection with the Fauntleroy Place project and is merely seeking to be fairly compensated for the project development services it rendered. BlueStar has been committed to, and worked diligently for the Fauntleroy Place project from the very beginning and was shocked and saddened to be summarily terminated in December 2008.

The action was filed after a formal request for mediation was rejected and was in no way intended to adversely affect any current activity on the project. BlueStar continues to believe that bringing Whole Foods to West Seattle as part of the Fauntleroy Place development will be good for West Seattle. BlueStar wants to see the project succeed and does not believe that the filing of this action is inconsistent with that goal.

what a great opportunity for a small business startup fabric store in one of the many now open retail spaces, along California? or why doesn’t Hancock open an interim smaller store in another location? I love to sew, and agree that with current economy, having local access to sewing supplies is a huge value; please someone?
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I’m not much a fan of Whole Foods, never shop there; but was looking forward to this development as great new addition to our neighborhood, especially as gateway to West Seattle; hard to say whether big empty hole looks worse than old auto supply & old fabric store; that building was very ugly

Hancocks deal is actually part of the problem…or rather Blustars inability to draft good deal documents. Hancock will pay so little for such a large and overly expensive place, the project was relying on WF and the condos for majority of the returns. This is the exact opposite of how traditional projects operate where the retail supports the residential. Trust me. Hancock is making off like a bandit in this deal considering how cheap their space will be.

The real losers in this are you West Seattlites who have this gargantuan hole…Unless the project was stalled due to community hatred as many other holes around the city are a resultant of.

YEAH!!! PLease leave West Seattle to us locals. The very beauty of why we live over here is being sold off and dug up, just like the rest of the city. I don’t mind new people moving here, it’s just that to come here and then to start changing the very fabric of it is wrong. We don’t need another high-end grocery store, we have MM, PCC, and plenty of niche shops to get us through life.

Another proud West Seattle resident that’s glad to see the OVER development stop.

So now we’ll have our own perpetual hole in the ground like Stone Way. I wish the city would require performance bonds for these projects so this wouldn’t happen. If the horrible “Junction Megaproject” actually begins demolition, what guarantee do we have that the project has complete and irrevocable funding through completion?

It concerns me that there’s just this little flimsy fence around that giant gaping hole. I hope there are no car accidents that happen near there. It just doesn’t seem safe. BTW Whole (Hole?) Foods is not a union employer.

I agree on the Trader Joe’s. Who can afford to shop at Whole Foods anyway? A Trader Joe’s store is badly needed in West Seattle and would make a lot more people happy than an overpriced luxury store like Whole Foods.

It seems as if there’s just a lot of dead empty space in that general area of west seattle stretching along 39th ave sw/fauntleroy ave sw/sw alaska street and it’s too bad they don’t add some retail stores that cater to the low income community more like a big lots would be cool, or a grocery mart. Just a thought. could care less about a whole foods mart

As we have noted in the previous reports, BlueStar has said the fate of that project – and the mixed-use building at 5020 California – depends on what happens with Fauntleroy Place. So both of those are at the very least up in the air. The Gateway Center project hadn’t gone very far, fwiw – they had options on the property, they told me – and it hadn’t even gone to early design guidance. But 5020 California had gone all the way through Design Review and the buildings on the site had been vacated – TR